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OUTSOURCING INDUSTRIAL WASTEWATER TREATMENT . Jerzy Kołłajtis – [email protected] Magda Trybuch – [email protected] (+48 22) 833 09 36 Bytomska 5A, 01-612 Warszawa ADVENT-ENVIRON www.environcorp.com www.advent-environ.com. WHAT IS OUTSOURCING?. Replaces existing in-house function

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outsourcing industrial wastewater treatment
OUTSOURCING INDUSTRIAL WASTEWATER TREATMENT

Jerzy Kołłajtis – [email protected]

Magda Trybuch – [email protected]

(+48 22) 833 09 36

Bytomska 5A, 01-612 Warszawa

ADVENT-ENVIRON

www.environcorp.com

www.advent-environ.com

what is outsourcing
WHAT IS OUTSOURCING?
  • Replaces existing in-house function
  • Contractor will reduce industry costs
  • May provide better service
  • Contractual arrangements are key
  • Established in municipal market
  • Growing trend in industrial market
what can be outsourced
WHAT CAN BE OUTSOURCED?
  • Staff
  • Services
  • Programs
  • Utilities (water, power, wastewater treatment, waste disposal)
  • Equipment (i.e. leasing)
  • All of the above
slide4

DEGREES OF OUTSOURCING

Process & Detailed Design Engineering & Construction

  • Traditional contract engineering services
  • Applicable to new plant or upgrades
  • Ensures smooth transition to client control
  • Can help safeguard warranties

Startup Support & Operator Training

Troubleshooting

Problems

  • Emergency response
  • Not cost-effective if it becomes routine

Technical

Support

  • Identify and avoid/reduce problems
  • Ranges from data review to operator direction
  • Manpower service
  • Client management remains in place

Operations

Labor

Contract

Management

  • Assume control of all labor, budget, reporting
  • Establish performance criteria

Purchase Assets, i.e Own/Operate

  • Can transfer more risk to operator
  • Detailed contracts needed to address risk
reasons to outsource
REASONS TO OUTSOURCE
  • Go to your core competencies
  • Redirect management time
  • Reduce operating costs
  • Better performance
  • Capital upgrades can be annualized
  • Selling assets improves bottom line
potential problems
POTENTIAL PROBLEMS
  • Perceived loss of control
  • Resistance from in-house staff
  • Define performance specifications?
  • Upfront additional effort
  • Transfer of staff to contractor
  • Contract can reduce flexibility
what about compliance
WHAT ABOUT COMPLIANCE?
  • Industry “must control” this
  • Contractor image versus yours
  • Responsibility for any violations?
  • Who is the permit owner/operator?
  • Contractor has core competency
  • More outside resources available
slide8

PATH TO OUTSOURCING

Determination of Need

  • Clearly define corporate or site driving force
  • Get preliminary buy-in from stakeholders
  • What is the upper & lower limit for contractor scope
  • Identify qualified contractors

Decide on How to Implement

Due Diligence

  • Open book or bid package
  • Prepare responses to bidder questions

Business Proposal

  • Range on bids is proportional to info provided
  • Normalize bids based on your priorities
  • Scope is firmed up for contracting stage
  • Confirm handling of development costs

Confirm Final Scope

Negotiate Contract

  • Formalize the risk/reward equation
  • Very time consuming

Transition to Provider

  • Provide qualified client liaison person
  • Contractor “A-team” onsite for short term
contracts
CONTRACTS
  • Payment terms
  • Establishing performance criteria
  • Extent of liabilities
  • Share risk & savings
  • Cost of termination
  • Can lock out creativity
summary of outsourcing
SUMMARY OF OUTSOURCING
  • Focus on core competencies
  • Lower operational costs
  • Annualize future capital costs
  • Contract is key
  • Can increase industry overall control
  • Needs commitment from all
  • Assess contractor performance
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